Tax strategy

1.0 Scope

The Group’s Tax Strategy for the financial year ended 31 March 2024 is set out below in order to satisfy the requirements of paragraph 16(2) of Schedule 19, Finance Act 2016.  The Group comprises Wave Ltd and its two wholly owned subsidiaries – Anglian Water Business (National) Limited and NWG Business Limited.

2.0 Aim

The Group’s activities are wholly UK-based and the Group is committed to fully complying with all the statutory tax obligations that are imposed on its individual members or on the Group as a whole, including the payment and recovery of taxes at the right time, the submission of tax returns, and the provision of information to HM Revenue and Customs (HMRC) to support the amounts of tax concerned.

3.0 Strategy

The Group’s Board owns and approves the Tax Strategy which comprises the following four components:

a) Tax risk management and governance

The Board reviews and approves all significant investment and business operating decisions directly or delegates the appropriate authority.  The Audit Committee (a sub-committee of the Board) considers significant tax related matters as part of its monitoring of internal controls and financial reporting arrangements.

The Finance Director is the member of the Wave Leadership Team with responsibility for tax matters. Day-to-day management of the Group’s tax affairs is delegated to appropriately qualified staff who have responsibility for specific taxes and, in the case of corporation tax, to the tax department of one of Wave’s shareholders (Northumbrian Water Group). With the exception of employee related tax where additional controls are in place, everybody with responsibility for tax reports to the Finance Director who, in turn, reports to the Audit Committee and the Board as appropriate.

The Group’s tax affairs are always conducted in a business-like manner in accordance with its commitment to corporate responsibility.

b) Tax risk management

The Audit Committee oversees the risk assessment process applied by the business which includes an assessment of tax risks.  Significant risks identified by the business are escalated for the Board to consider.

As far as possible, through the activities of its Board, Audit Committee and personnel responsible for tax matters, the Group seeks to reduce or eliminate the level of tax risk arising from its operations by ensuring appropriate processes and controls are in place.

The Group only takes tax positions which are justifiable and based on applicable law, with advice taken from reputable professional firms where necessary.

To help manage tax risk, the Group’s taxation affairs are only handled by appropriately qualified and experienced staff and, where necessary, training is given to non-tax staff who are involved in processes which have tax implications.

The Group does not tolerate or condone any form of tax evasion, whether committed or facilitated by its own staff or any associated persons (e.g. agents and other persons who perform services for or on behalf of the Group) and manages this risk by the use of appropriate processes.

c) Attitude to tax planning

The Group considers tax as part of its business decision making process.  When entering into commercial transactions, the Group seeks to obtain the benefit of tax incentives, reliefs and exemptions available under UK tax legislation, consistent with the purpose and the letter of the law.

The tax affairs of the Group are arranged and managed in response to, and in support of, its business or commercial activities.  Related party transactions are managed and documented to ensure they are in compliance with applicable tax laws and regulations.

d) Dealings with HMRC

The Group seeks to have a transparent and constructive relationship with HMRC on all taxation matters and keeps HMRC aware of significant transactions and business developments.  All contact with HMRC is conducted in a professional and courteous manner.

The Group seeks to obtain certainty from HMRC at the earliest opportunity on the tax treatment of complex or uncertain issues or to establish the appropriate understanding or interpretation of the law. Where necessary, discussions will be held with HMRC to consider any significant tax risks and agree on the steps required to take matters forward.  Resolution of any disputed matters will be sought through open discussion and negotiation with HMRC, but the Group is prepared to litigate in cases where it believes the technical basis of a decision is incorrect.

Date published: 13 March 2024